Ready, steady BUILD

The UK housing sector faces unprecedented change, and the most ambitious sustainability targets in the world. Mike Scott reports on the challenges ahead

All new homes in the UK must be zero-carbon rated by 2016, and the industry must deliver 240,000 new homes a year by the same date.

Emissions from homes account for 27% of UK carbon emissions, according to the Department of Communities and Local Government. And one third of the housing stock in 2050 will be built between now and then. It is much easier to make new houses environmentally friendly than to retrofit existing homes, so this represents a real opportunity to cut the impact of the housing sector.

In December 2006, the government set out its proposals for meeting the targets, which are the most ambitious in the world. Building regulations are being tightened to increase energy efficiency and cut the carbon footprint of all new homes. And a Code for Sustainable Homes has been drawn up to make houses more environmentally sustainable, giving homeowners better information about the efficiency of their home.

Gordon Brown announced at last September's Labour Party Conference that ten new eco-towns would be built on brownfield land. More than 30 authorities have put forward plans for the developments, which will attract government funding, expertise and advice. These developments, of 5,000 to 20,000 homes, would have strong public transport links to nearby towns and cities and would use brownfield land such as former MoD or NHS sites. Ministers believe these new developments could help drive the market for the environmental technologies needed to meet the zero-carbon target. A decision on the first five eco-towns was due last month.

These measures are complemented by two further initiatives - Energy Performance Certificates (EPC), which were introduced last year and give existing homes an energy rating; and a zero stamp duty rate for zero-carbon homes. EPCs are intended to boost the value of low-carbon homes.

The code sets out a rating from one to six, with six being the most sustainable. From April 2008, all new homes should have a rating showing how they performed against the code. It measures homes on a range of design categories - energy/CO2; pollution; water; health and well-being; materials; management; surface water run-off; ecology; and, waste.

The starting point for the target, or Code Level 0, is the requirements of the 2006 Building Regulations. There must be a 25% reduction in emissions from new homes by 2010 and a 44% cut by 2013, which corresponds to Code Level 3. All new homes must reach Level 6 by 2016. And the incentive for house builders could not be higher: if their plans do not meet the target, they will not get planning permission.

"Code Level 4 is about as far as you can get by working with the fabric of the building, using features such as airtightness, insulation and the thermal mass of the structure, while using mechanical ventilation rather than air conditioning," according to Anna Scothern, director of the National Centre for Excellence in Housing (NCEiH). It is also about the level of the most advanced homes available elsewhere in Europe, where a lot of work has been done with passive house standards. In level 5 homes, the energy for heating, lighting and hot water should be generated by zero-carbon sources such as solar panels, and they would also incorporate features such as rainwater harvesting and greywater recycling. Level 6 homes would get all their energy from zero-carbon sources, preferably on the house or on site, says Scothern.

One of the companies most involved in working towards Level 6 is Barratt. The company has been looking at which green technologies work best, at its eco-village site in Chorley, Lancashire.

Preliminary results show that ground source heat pumps and photovoltaic (PV) roof panels worked "very well", while micro-combined heat and power units were trouble free and solar thermal hot water systems were "reasonably satisfactory" - the latter two technologies were still under trial so full results were not available. However, payback for a £7,800 heat pump would be up to 15 years, while PV panels would cost around £4,500 and take around 37 years to pay for themselves at today's electricity prices, suggesting that if the government wants to encourage uptake of these technologies, increased subsidies or feed-in tariffs may be needed. The trial also showed that micro-wind turbines were disappointing.

The company is also working on the Green House, a project at the Building Research Establishment's Innovation Park in Watford, which will be the first home to qualify for the stamp duty exemption. Innovative features of the house, which will be completed in the spring, include:

An air-source heat pump converts the energy of air from indoors or outdoors into heat for the house

Warm air rising through the house is used for clothes drying

Hot water will be supplied by a solar hot water panel on the roof

Automatic window shutters controlled by the occupier system will help prevent over-heating of the house during the summer

PV panels on the south-facing roof and the adjacent building will simulate a district power supply (it is more efficient to power 20 homes than one)

A rainwater harvesting system used to provide water to flush the lavatories

Thanks to these features, the house will not need appliances such as a tumble drier or radiators. Barratt plans to take the most successful aspects of the design and apply them to the houses it builds in future, starting with its 200-unit Hanham Hall site near Bristol, which will be the UK's first zero-carbon development meeting Level 6 of the code. The development will include a wood chip-fuelled CHP plant instead of micro-generation technology.

With only eight years left to deliver the changes, there are many challenges to overcome. According to the Calcutt Review, which looked at how the industry could deliver the government's targets, "England's house-building industry is in shape to deliver the homes we need for future generations and is capable of delivering 240,000 homes a year by 2016." However, it says, the industry will be stretched to meet the goals in this very tight timeframe and strong government leadership was needed.

To achieve zero carbon, two different goals need to be pursued at the same time - improving the energy efficiency of buildings and securing a renewable zero-carbon energy supply. "The routes to energy efficiency and to renewable energy are different, and the house-building and construction products industries will respond to them in different ways," the review says. Or, as Dan Bridgett of Barratt says: "This requires a step change at every level of the process - design, planning, construction and final delivery of the unit to the consumer."

At the moment, a zero-carbon home would be about £30,000 more expensive than a normal house, says John Slaughter of the Home Builders Federation, so one of the key challenges is to cut costs. This will happen naturally as technologies such as PV, heat pumps and CHP become more widespread and as demand for other energy-efficient materials grows. Suppliers also have to build up supply chain capacity - to build 240,000 homes in an entirely different way, a large amount of new materials and products need to be available.

One industry figure says companies pioneering the use of renewable energy and innovative materials should get tax breaks for their research and development (R&D).

"You get very little credit for R&D in housing. The National Centre for Excellence in Housing should rank companies by R&D spend - then you would see the market factor in how important green technology is and reward companies that are working on this." Slaughter agrees. "At the moment, there is not sufficient reward in the system to encourage the investments that are needed," he says, while customers are not willing to pay a premium for eco-homes, so builders are unable to pass on the extra costs. In addition, "we need to work with local authorities to facilitate decentralised energy schemes," Slaughter adds. "The energy system is geared towards centralised generation and distribution."

There are fears that the skills needed to build these homes are simply not available.

Julia Plaskett, sustainability manager at Crest Nicholson, says there is little experience in the delivery and installation of renewable energy systems or CHP. "These technologies are completely alien to the UK housing industry, and there are examples where poor installation has wiped out all the benefits," she says. "Customers will end up being guinea pigs and being asked to operate their homes in a completely different way. They need to be fully engaged with this agenda and how it benefits them." The focus on new-build is not necessarily logical in terms of the cost of the carbon savings achieved. "The carbon savings between levels four and six are negligible but the cost impact is huge."

NCEiH's Scothern says: "This is a very tough target - but we will be well on the way by 2016, even if we don't actually achieve it." But Plaskett says that, while everyone agrees with the need to deliver more environmentally friendly housing, the time scale is very short.